Commentary

Prohaska Predicts At Least 2 More Holding Cos. Will Fold Trading Desks Back Into Traditional Media Teams

Matt Prohaska, CEO & principal, Prohaska Consulting, consults on a variety of topics in the media business for brand marketers and publishers.  Prior to founding the company, he worked for ad agencies and publishers and most recently, was the programmatic advertising director for The New York Times Co.

RTBlog asked Prohaska for his thoughts on 2017 scenarios:

Many prognostications about digital tech rolled out over the next month will focus on the same trends we have seen start to play out throughout 2016, such as the managed-services model moving to self-service, more transparency around pricing and business models, mobile data feeding better digital out-of-home campaigns, the scaling of addressable TV, and martech companies buying/building/partnering their way into ad tech. I would like to propose three others based on a larger global view.

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“Come together, right now, over me." This is a request coming from some major marketer clients of agencies. Think about the Beatles song and all the things agencies have: Talent that knows both contextual placement and audience targeting, access from ownership or partnership with buying platforms in all media channels, and more pressure on margins, fairly or unfairly, than at any time in recent memory.

The motivations for publicly traded holding companies to set up separate trading desks in the name of financial efficiencies are starting to be one-upped by client recognition of double-dipping on fees -- and a recognition of the greater strategic and operational efficiencies that bringing teams together may bring.

These are all reasons why we predict at least two more holding companies will start to fold their agency trading desks back into traditional media planning and buying teams with great cross-training by the end of 2017.

“Viva General(ist).” Speaking of integration for efficiency purposes, we think many more traditional sellers have moved from wanting to know what programmatic is, to how ‘do I answer a few questions to appease my client,' to wanting to own the complete process and relationship with any programmatic buyer.

I was proud to have been the first person at a publisher to have the word ‘programmatic’ in my job title when I built the practice at The New York Times in 2013. But we have said for two years now that the word ‘programmatic’ will eventually go away, as it becomes a standard way of doing business, not a separate practice.

By our calculations, we predict the percentage of top North American and Western European national publishers with fully integrated sales teams selling programmatically -- in all digital media including TV, out-of-home, and radio -- will increase from 5% today to 15% by year-end 2017.

“We’re from The United States…no, really, we’re here to help.” No matter where you lean on the political spectrum, or how you feel about our recent election results, there has never been a more important time for U.S.-headquartered companies to demonstrate humility when looking to expand globally and learn.

Look farther afield. The development of programmatic best practices for buyers, sellers, and ad tech companies is increasing in Latin America and Asia-Pacific. These regions are starting to catch up to those of us in North America and Western Europe. Many ad-tech companies are smart to hire locally and recognize that not every market, within a region like APAC, is the same. Each market offers distinct challenges and opportunities.

We predict several tech companies will succeed at expanding globally with separate hiring practices and branding, and several will fail because they wrongfully assume that everyone outside the U.S. must be ignorant.

These predictions reflect what we are seeing and hearing when working with our clients and teammates around the world. One of my major takeaways from this year’s Presidential election is to make sure we’re all listening and understanding one another other as much as possible -- so please tell me where and why I am wrong here!

1 comment about "Prohaska Predicts At Least 2 More Holding Cos. Will Fold Trading Desks Back Into Traditional Media Teams ".
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  1. Ed Papazian from Media Dynamics, December 12, 2016 at 10:55 a.m.

    I predict that Matt will make exactly the same predictions next December---for 2018---and again, a year later. By that time every traditional ad seller and buyer will have joined the programmatic bandwagon and advertisers will, at long last, be able to vastly improve their targeting efficiencies. Media sellers will also reap undreamed of profits as their GRPĀ  "inventories" will be far better monetized. And those long tail channels---the one which reach 500-1000 viewers per minute---will become wildly profitable, thanks to computerized buying, based on "big data" set usage ratings merged with independent "third party" product purchase data. As a result, the country's economy will turn from gloom to boom, with growth rates rising to 10% annually---all because programmatic will make media buying so much more impactful, causing consumers to welcome a barrage of "more relevant" ( finely targeted ) ads, which, of course, will make them buy and buy and buy.

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